Doing Business in Costa Rica
Doing business in Costa Rica can be a challenging proposition, to say the least. Especially when one compares the ease of doing business here with its neighboring countries, one wonders why Costa Rica is a consideration at all. According to the International Finance Corporation, Costa Rica currently ranks 121st in the world in its overall “ease of doing business”. This ranking is a compilation of various factors, including starting a business, acquiring credit, paying taxes, trade, and more. These are then stacked against other countries worldwide in order to calculate its relative position. Considering Costa Rica has lofty ambitions of being a global competitor despite its small population 4.5 million people, this measurement has been considered a fair and balanced tool, and a launching pad for many looking into setting up shop.
That said, any multinational entrepreneur will attest that you need “boots on the ground” to truly asses the business climate, study the market, and understand the conditions in which you would choose to open your business. Depending largely on the type of venture you wish to engage in, Costa Rica hosts a wide variety of opportunities for those willing to be patient, learn the culture, and study the market. Despite Costa Rica being a hot tourist destination, and still remaining a serious contender for those retiree dollars, this can be both a climate for business and pleasure alike.
Often times in a developing nation it can be found that tried tested and true business models from North America and Europe can simply be transplanted to the destination market and modified to such a point that it fits, and grows, in its new business environment. “Repotting” franchises has a low failure rate here, for example. Having said this, in Costa Rica one such modification can be found in a verb common to those managers who’ve been temporality expatriated. Tropicalize. Though bringing a proven business model into a maturing market may have proven success stories, the management layer of those success stories will tell you it wasn’t quite that easy. They indeed needed to modify both their business, and their management style to suit to the culture. No matter what industry you find yourself in, there will be inevitable cultural clashes with you clients, suppliers, customers, employees, bankers, lawyers, etc. In these and more cases, it is critical to “tropicalize” your style. North American entrepreneurs often tell tales of long and strong companies who have grown their business over years with determination and strength, as with the mighty oak tree; unshaken by winds and unbreakable in its rigid, stately form. However, were one to plant that tree in Costa Rica, it would easily be toppled to the ground with the slightest push of a December wind. This is a landscape riddled with palm trees. Still tall, stately and strong, they bend and flex with the wind and are therefore immune to environmental turmoil. It is this flexibility to the local business climate that you hear referred to as being “tropicalized”. If you aren’t able to bend and flex with the culture, you will surely snap at the first sign of a hurricane.
On the matter of doing day to day business here, the Costa Ricans are an upwardly mobile, well educated, intelligent population of skilled and qualified workers. As this culture has had a high exposure to both North Americans and their businesses, adjusting to the business environment here can be a smooth cultural transition. A popular career path for many Costa Ricans is to be working in multinational offices and support centers for companies such as Intel, HP, and Proctor & Gamble. A growth spurt in professional services from organizations such as Oracle, Ernst & Young, and more have given rise to a growing middle class. Now being regarded as the “Switzerland of Central America”, the Costa Rican workforce is moving steadily out of the banana and coffee plantations and into the offices and cubicles many of North Americans come here to escape. This shift from skilled laborer to qualified employee has been the backbone of a booming, growing economy for the past decade. Office parks and free zones are mushrooming across the lush, green landscape as more and more companies are being incentivized by the organizations such as CINDE and the government to move their offshore operations to a welcoming business climate in a time zone shared with their North American counterparts.
As with any new venture, and in advance of your decision to start doing business in Costa Rica, it is always advisable to seek the legal counsel of local experts in both law and real estate. One such firm is Real Estate & Business Attorneys Costa Rica. Re&B law firm keeps an important international profile as they maintain a multinational network with law firms worldwide that allows them to provide their clients with an efficient and integrated service. They particularly keep solid contacts with law firms in the United States, Spain and Latin America. Their services extend to different areas, particularly to Real Estate Investment, Industrial and Intellectual Property Law, Corporate Law, Foreign Investment, Tourism and Hotel Resort Development, Customs and International Trade Law, Public Notary, and more.
Whether you’re considering moving part of your organization offshore, or contemplating jumping ship altogether and plunging into fresh waters and starting anew, Costa Rica does boast beautiful, turquoise seas that beckon anyone who’s been grinding their way through the concrete jungle. It is critical to do ample research here first as Costa Rica is literally a jungle, and the waters do have their share of sharks.